Do we need to fix the economy to be happy?
Share this on

Do we need to fix the economy to be happy?

MALAYSIANS have been a little uptight about the economy in recent months and they have plenty of reasons to complain. The ringgit has dropped significantly in the past year or so, although a slight respite was seen last Friday when it closed the week slightly higher than expected.

Even in real terms for local people, RM1 doesn’t go as far as it once did as inflation continues to rise while the value of the ringgit continues to decrease. With the cost of living rising and salaries stagnant, purchasing power has dropped tremendously among the population. Let’s not even talk about the sharp rise in real estate prices.

A recent financial survey conducted by the country’s central bank, Bank Negara Malaysia, indicated three out of four people would have difficulty scrounging together as little as RM1,000 (US$225) for emergencies.

As much as I appreciate the seriousness of these economic hardships and agree they need to be addressed by financial regulators and the appropriate government bodies, I would also like to highlight a little bit of positivity.

SEE ALSO: Pressure on Malaysian ringgit as graft probes pile up

I recently stumbled across a formula for happiness that made me rethink the significance of money when it comes to our personal contentment.

It was discovered by Nobel prize-winning economists Gary Becker and Luis Rayo from the University of Chicago, and proves humans can never make decisions that lead to happiness.

Happiness = your success minus your expectations = your perceived social status

I recently read Charles Montgomery’s book Happy City, in which he passionately explains people’s happiness is never constant, but is continually moving around no matter what the situation is, be it in good economic times or not.

Everyone will always be making comparisons of what we have now, what we used to have in the past, and what we can probably have in the future. Basically, that means if I buy a house now, I would compare it to the small apartment I had before.

But any happiness felt after the initial purchase would be short-lived, as I would soon be thinking it would be even better to have a nicer and bigger house in the future. I would constantly need everything bigger and better.

Some people might argue this is what makes us continue to strive to improve ourselves and make our lives better. It’s what makes us move up in society. But is moving up in society this way really the key to happiness?

SEE ALSO: Most of Asia getting happier – UN World Happiness Report

In the society we live in, our natural instinct as people to never be satisfied with our lot is just going to cause us heartache and disappointment for the rest of our lives.

Montgomery says we need to learn to distinguish between extrinsic and intrinsic motivators that keep us going. Extrinsic motivators come with external rewards. Intrinsic motivators come from within. A journey is itself a reward because it gives us a sense of significance.

So if we are able to find a balance between the extrinsic and the intrinsic, and find the kind of happiness that is more long-term, that would make our lives just that much happier. Or so the formula says.

But of course, all this is far easier said than done. At the end of the day, reality will set in – if we are living hand to mouth, and God forbid something happens, like a car accident or a hospital visit, and we can’t find the funds to fix it, intrinsic motivators do not mean much.

I guess as much as we try to control our personal emotions and psychology, when push comes to shove, we still need to fix the economy.

** This is the personal opinion of the writer and does not reflect the views of Asian Correspondent